Major City investors may yet revive the corporate reporting standards abandoned by Gordon Brown yesterday by incorporating them into the combined code on corporate governance with which companies already comply.

The Association of British Insurers, which represents investors who control a quarter of shares on the stock market, is to discuss the possibility of extending the combined code at the next meeting of its investment committee next month.

The Financial Reporting Council (FRC), which had been working closely with the government on implementing the operating and financial review (OFR), also urged companies to press on with plans to publish the annual review of their business as would have been expected if the government had continued with its original plans.

The chancellor yesterday stunned delegates at the CBI annual conference by announcing that as part of his plans to cut the burden of red tape on business he would abolish the need for an OFR, which was to come into effect next year.

Paul Boyle, chief executive of the FRC, said: "Our position is that we have for a long time said the numbers in a set of accounts can't tell you everything about a company ... We will be encouraging people to do it."

ABI's head of investment affairs, Peter Montagnon, said it was a "matter of considerable regret that so much effort and energy has been wasted on this, including the creation of an accounting standard.

"Many companies already produce an OFR on a voluntary basis and most large companies also take account of the ABI's reporting guidelines on risk management and corporate responsibility. We believe it is important that this trend continues. We need to develop best practice and it might be worth considering the scope for some reference to this reporting in the combined code. We will be discussing this in more detail at our next investment committee meeting in December."

Major investors expressed their disappointment at the abandonment of the statutory backing for an OFR. Karina Litvack, head of governance and socially responsible investment at F&C, said: "Whilst we regret the position taken by the chancellor, we hope companies will continue to work towards implementing OFRs, albeit on a voluntary basis."

Anita Skipper, head of corporate governance at Morley Fund Management, said: "The OFR would have given companies the opportunity to educate, explain and persuade."

The FRC has been trying to introduce a type of OFR report for the last 10 years but the move by the government to put the report on a statutory footing was regarded as giving the idea an extra fillip.

The Association of Chartered Certified Accountants was dismayed that this would no longer be part of a new package of reforms being introduced. "We query what has caused the government to change its mind so dramatically on the OFR, particularly since provisions dealing with the new statement appeared in the long-awaited company law reform bill when it was published earlier this month," said John Davies, head of business law at ACCA.

Lawyers noted that the back-tracking by the chancellor now left some uncertainty for businesses, particularly as the EU directive was still coming into force. The law firm Lovells said: "There are a substantial number of the changes to the EU directive on consolidated accounts made by the accounts modernisation directive that remain even if Gordon Brown repeals the OFT requirement. Has Gordon Brown issued a 'down tools' order when a large job remains undone? Companies need to take care not be misled."

Responding to criticisms of the OFR announcement, a Treasury spokesman said: "It is, of course, best practice for companies to report on social and environmental strategies relevant to their business and the government welcomes the moves of many companies to do just that.

"But that is very different from suggesting it is right to place on all British companies a blanket requirement to do so at the cost of millions of pounds every year in additional administration."